I made a rare trip to Powell’s City of Books yesterday. This used to be one of my favorite hang-outs, but as I’ve learned to love frugality and to hate clutter, my book spending has plummeted. As a result, I spend much less time in book stores. I use the public library instead.
Still, sometimes I allow myself to buy new books. Yesterday I picked up a stack of personal finance titles to review during the coming months, including:
- Work Less, Live More: The Way to Semi-Retirement by Bob Clyatt
- Getting Started in Value Investing by Charles S. Mizrahi
- Why Smart People Do Stupid Things With Money by Bert Whitehead
- Retire on Less Than You Think by Fred Brock
- Get Rich Slowly: Building Your Finanical Future Through Common Sense by William T. Spitz
Though I looked at several comics compilations, I exercised willpower and didn’t actually buy any of them. When I went to the register to pay for my books, the checker gave me a wry smile. He tapped Work Less, Live More with his finger and said, “Sounds good to me.”
“Yeah,” I said, smiling in return.
He nodded and continued. “I’ve got a stock tip for you,” he said.
“Oh yeah? What’s that?” I asked.
“Trader Joe’s,” he said.
“Trader Joe’s? Are they even public?” I’d never heard of anyone buying stock in the company.
“Not yet,” he said. “But they’re bound to be someday. You can’t lose. People love them. And they seem to be everywhere. I’d get in on the ground floor of that.”
I made listening noises and smiled. Stock tips in book stores are worth what you pay for them. It’s true that people love Trader Joe’s — I love them too — but I don’t know if an IPO would be considered the “ground floor”. And there’s no guarantee that purchasing Trader Joe’s stock would actually be a profitable decision. There are too many other factors.
“There you go,” the checker said as he handed me my receipt. “Thanks for coming in today. And good luck with your millionaire schemes.”
My millionaire schemes? All I’d done was ask some questions. I wished I had time to point out that my books weren’t about “schemes”, and weren’t even necessarily about becoming a millionaire. I bought them because I thought they’d contain advice on smart personal finance. I wasn’t the one handing out hot stock tips.
“People do love Trader Joe’s,” Kris said when I told her this story. “Some people at work, all they eat is Trader Joe’s!”
sigh
Maybe when Trader Joe’s goes public, I should consider buying stock in the company. Maybe.
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J.D. – If I had realized you didn’t already have Spitz’s “Get Rich Slowly,” I’d have sent you one myself! It’s an OUTSTANDING guide to investing for the long haul — talks about the importance of index funds and asset allocation to a superior return, and provides great guidance on the asset mixes you want at various stages of your life, and why. This is the personal finance book I consult the most — have many pages with corners turned down.
And the guy used to be the treasurer for my college’s endowment, which always did frighteningly well. I interviewed him a couple of times when I was with my school paper — dry as a bone, but knew his stuff. I think you’ll enjoy it and look forward to hearing about your reaction to it.
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I live next door to a Trader Joe’s and it is ecstasy. Too many good foods to count.
I too had the thought of whether they might go public. I would actually be disappointed if they did. Their rollout is controlled, and their word of mouth is spectacular. People drive down from the adjacent state to visit the location next to me. TJ’s would be smart to avoid the whole boom/bust cycle of the stock market . . . leaving themselves open to predatory investment bankers, the temptation to resort to tax and accounting tricks to please the market, and possible gross overexpansion and cheapening of the brand. Not that this happens to all IPOs, but look at Starbucks (now a commodity instead of a novelty, resorting to TV ads for the first time to prop up sales after major expansion) and Krispy Kreme (accounting problems, overexpansion, poor franchising management). Granted, even as a private company, TJ’s is there to make money, and I’m biased because I like the store and the experience of shopping there, so I’m not being as coldly rational as an investor might. I would like to see them continue their slow, controlled plan of expansion and control of distinct market areas. They’re making money. Why spoil something that’s already working?
Stock tips in the bookstore . . . Isn’t the receipt of stock tips from noninvestors the stereotypical sign of an impending crash?
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Trader Joes must be regional because I have no idea what that is. Kind of how people out of the area don’t know what Meijer is and they pronounce it My-Jer instead of My-er.
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That’s funny because I always tell my wife that Trader Joe’s is the number one company I would buy stock in if it was available. My in-laws fell so in love with TJs when visiting us that they now drive over 100 miles to get to the store nearest to them down South. TJs has been expanding like mad too over the past few years.
Sadly, I doubt it will ever go public since it’s owned by one off the richest men in Germany who has a supermarket empire. Yes, TJs isn’t even an American comapnay anymore.
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Wow. That was a bit presumptuous for a bookstore employee to comment on your purchases. We avoid that sort of thing in the library world with the books you checkout and questions you ask.
Anyway, I’m still kicking myself about Google’s IPO.
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Since this is turning into a TJ’s love fest: I have certain things that I MUST HAVE from Trader Joe’s. I but its Salsa Autentica by the case. I love that stuff. I pick up the “three-buck Chuck” (which I know is “two-buck Chuck” in California) — a frugal wine-drinker’s dream. I buy my nuts there. Kris has stuff she likes, too.
We don’t go often because it’s a twenty minute drive to reach the nearest store, but we do stop by if we happen to be in the neighborhood.
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“When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing”
~Bernard Baruch, 1929
One day in the spring of 1929, Baruch was having his shoes shined and listened as the shoe shine man offered him a series of stock tips. When he got to the office Baruch sold himself out of the market, saying that when the market is determined by what the shoeshine man thinks is a good buy, it is too speculative and time to get out.
I don’t know if the above is true or not, but its a pretty well known anecdote.
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I work at Trader Joe’s, and from what I understand they have no plans to ever go public. They handle their finances very well and pay cash for everything.
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I used to live around the corner from a Trader Joes and we rarely went there. Just couldn’t get into the stuff we tried. Now I’m in Canada where they don’t exist, so I suppose it’s a good thing I didn’t get hooked.
I imagine book shop staff get a lot of customers buying outright scam books – “Become a Gazillionaire Buying Foreclosures!” or “Lose Twenty Pounds By Eating Chocolate!” and the like – which unfortunately personal finance books can often look like in their garishness and pics of authors on the front. Still a bit weird that he commented, but it takes all sorts.
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If I find a book title I like, I just go to Amazon.com and punch it in.. It arrives days normally at a great discount. It is also easy to set up a seller’s account and resell the book when done.
And Trader Joes is excellent. Whether or not it would be a good IPO purchase depends on the original market price of the offering. Based on the prior statement that some people have not heard of them, means they have room to grow. That is good for a long term holding. We live 1 1/2 hours away and I have stood in line and listened to the zipcodes provided by shopppers in front of me and found that a large percentage come from my home town. Trader Joes has no plans to open in our area which indicates to me that they do not intend to over extend themselves.. Seems like a very good business.
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To pass judgment on your customers is an incredibly poor business practice. I realize that he’s just a clerk, but he could still try to muster a bit of professionalism.
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I don’t buy as much at Trader Joe’s after I learned that they import food from China and started checking country of origin on labels. I had no idea that I was buying frozen food from China!
I wonder why the U.S. needs to import soybeans from China while China imports large amounts of soybeans from Brazil (bye, bye rainforest) because this is a cheap way to “import water,” which China lacks now because of its rampant environmental devastation. Meanwhile, our tax dollars subsidize soybeans as a monocrop in the Midwest. Seems really wasteful to have soybeans shipped frozen from China. I have no faith that any part of the production process is very sanitary.
It is good to buy some books at independent bookstores if one enjoys browsing for books in actual stores. Some of the books I’ve bought online would not have been bought had I been able to look at them in a bookstore. I used to love having different bookstores to visit, ones that had character as opposed to being sterile big boxes.
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I actually didn’t mind the clerks comments. He was being friendly and conspiratorial. Plus he gave me fodder for a blog entry. I just thought it was strange that he thought I had millionaire schemes, when it seemed to me that he was the one with the gleam in his eye…
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Have never seen a Trader Joe’s and I thought Meijer was pronounced May-Jer when we first asked about it.
But an IPO I want to get in on is VISA!! Some time in the next few months?!?
And I’ll be looking forward to your reviews on the above mentioned books.
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Typically, people investing in single stocks don’t make money, even short term.
Sure everyone knows someone who got lucky on the Google IPO, or the many that hit it rich with dot-com IPOs in the late 90′s early millenium.
But how many of them are still rich? I know several people that did very well with the Red Hat and VALinux IPOs, and most of them are still living paycheck to paycheck now.
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I guess it’s just me but I was horribly unimpressed by Trader Joe’s. Granted I’ve only been in one, but I didn’t see anything special about it.
It’s always sort of amusing to hear the reasons people have for their stock tips. “It’s priced really low, that’s a good stock to buy!” “It’s priced really high, that’s a valuable stock!” “Everyone loves them, buy that stock!” “They’ve hit a rough patch, great time to buy low!”
I’ll stick to mutual funds.:)
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Personally, *I* think it’s shocking how people are thinking this clerk’s comments were “presumptuous” and “unprofessional”.
It’s called — customer service. Connecting with the customer by exchanging a few pleasantries. Daring to show a little personality instead of being a dumb (silent) extention of the cash register. Whether I’m in a book store or a library, I still expect the person behind the desk to engage with me for a few moments.
What do you want them to do? Mumble “have a nice day” (if that much) while they won’t even make eye contact? While that is the growing norm, it’s not very pleasant.
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I’m sure your book on value investing will explain that deciding whether a particular stock is a good buy, in the value sense, has very little to do with how popular it is. If the stock is priced lower than your calculation of how much it should be, it’s a good buy, end of story. In fact often the best value opportunities are in overlooked companies that sell boring services to other companies.
Anyway I read a couple books on value investing and decided to stick with index funds.
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I bought Mastercard soon after it opened, and I don’t regret it for a minute. So to Ed@14-good luck with that!
I also agree with db as well. If you don’t want to talk to people, go to Borders or Barnes and Nobles-buy your books, get out, never saying a word. I like talking to people in the smaller stores. They care and show interest. What do I care if someone wants to make a comment about a book I’m buying? I’m buying it regardless.
I did think it was funny that he said “millionaire schemes.” I hope you can go back and share how your “scheme” worked with him at a later date.
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grocery stores have horrible margins. even if they went public, you wouldn’t want to invest in them as a long term bet.
why waste money on 10% margins at best when you can get Apple, Microsoft, or other companies with genuine competitve advantage and greater than 50% profit margins?
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I really like Trader Joe’s combination of affordable, organic and international products. I’d buy stock, because I believe in their business model and philosophy.
But don’t expect them to go public. As far as I know, it’s owned for 20 years by one the wealthiest Germans, the Albrecht brothers. They dominate the German grocery store market with their ALDI stores (business model: be as cheap as you can, by selling out-of-the-box, no presentation etc.), which is slowly coming to the US.
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I do not understand the appeal of Trader Joe’s, either. The produce is terrible; what they are known for is frozen and canned foods, much of which is the exact same product sold at your local grocery store under a different label. Why are people going wild for frozen and canned foods? I don’t get it, which is why I will stick to index funds–I’m terrible at predicting what the masses will go for.
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@7 icup: That’s the anecdote I had in mind; for some reason I thought it might’ve been Joe Kennedy who related it. Thanks!
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Well…in my opinion, the popularity of a company or product does not always necessarily translate into stock investment success.
For example, Lasik is very popular now, but Lasik stocks are doing terrible because the market is terribly saturated…
-Raymond
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thanks for the book ideas jd.. going to barnes and nobles to research!
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JD — How cool to be able to write off a trip to Powell’s as a business expense. Now all you need to do is start a profitable comic book blog, and you’d be all set!
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I’m afraid the “ground floor” for Trader Joe’s was many years back! And on a similar note, the same is unfortunately true of Wegmans. I also doubt either of these fine companies are going to go public any time soon. Both are very well capitalized and prefer a fairly slow rate of new store growth…
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When the guy commented on your “millionaire schemes,” you ought to have handed him a small card with http://www.getrichslowly.org on it, as a way to invite him to see what you’re really doing.
A Trader Joe’s opened here last year, and I like some of their items–some canned goods, berries, nuts, and some snack foods such as the pappadum chips. They have some decent wine at low prices, too. I’ve been less impressed with the frozen items I’ve tried, such as their pizza and heat-n-serve hors d’oeuvres.
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I can’t wait to hear about the semi-retirement book. I was thinking of picking that one up myself.
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I have to agree with icup (post #7) here. When everyone and their grandma is talking about a certain stock, you know it’s going to crash and burn. Remember the dot-com bubble!
Buy from pessimists, sell to optimists
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Interesting comments on the quality of TJ’s merchandise. Didn’t realize the food is coming from China–after this I’ll read the labels more carefully!
However: The butter is SO much cheaper than anyplace else in town that I make a special trip over to the nearest TJ’s rather than buying it in the grocery store. Box doesn’t say where it came from…”churned locally,” eh? In a local Beijing creamery? “From cows not treated with BST”…but no clue to where it actually was produced.
TJ’s premium dry dog food is substantially cheaper than similar dog food from places like Petsmart and Petco (compare the ingredients!), and they don’t make you divulge private information in exchange for an annoying card to get a relatively fair price. During the late great dog food scare, TJ’s dry dog food was unaffected, although they did voluntarily remove the canned stuff from their shelves.
Some of their cheeses are good, but if you’re looking for really premium gourmet cheeses, the TJ versions come across as pale imitations. And I have to agree with Anne that their produce is less than splendid.
Those things said, the joint is always crowded, any time of the day. It seems to appeal to two kinds of customers: elderly folks on limited budgets who still crave actual food, wine, & beer, and environmentally conscious types looking for butter that doesn’t contain BST. The chain has been around forever, and as the “green” fad grows, TJ undoubtedly will see a surge of middle-income and affluent customers. But is that enough to justify investing in it? Hmmm….
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Hey,
Whe don’t have Trader Joe’s here in France.
Actually i don’t have enough willpower to avoid buying books !
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Don’t take any financial advice from anybody who makes less or has less than you do.
Perhaps the book store employee is a millionaire who works there for fun. But truly, what are the odds of that? If his advice was actually valuable, other people would pay him for it.
Don’t be one of the blind following the blind.
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> Perhaps the book store employee is a
> millionaire who works there for fun. But
> truly, what are the odds of that?
Totally unrelated, but funny story: When I used to work for a bank in Liechtenstein as a contractor, all the executives had marked parking spots. On the best non-marked parking spot, there was always a latest model Porsche. One morning I said to my co-worker on the long walk from our car to the entrance: “This guy with the Porsche must be in early everyday, he always gets the best spot.” His reply: “Yeah, ’cause he’s the security guy at the entrance.” At first I thought it was a joke, but it was true: The humble and friendly guy at the entrance, who handed me my contractor badge every morning, was one of the richest men in Liechtenstein (excluding the royal family, of course), owning a substantial portion of the best local real estate. He just worked there for fun.
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“Don’t take any financial advice from anybody who makes less or has less than you do.”
I have to strongly disagree with this sentiment. Take, for example, MC Hammer. I can guarantee you he could have gotten some great advice from a few people who made less than he did. That’s just an egregious case.
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Re: MC Hammer… I should have written “…don’t take *investment* advice from people who make or have less…”
Hammer could obviously have used *budget* advice from some people who get by on less.
And one should be wary of taking advice from those who who charge for it especially if he/she is paid regardless of results (e.g. commissions, wrap fees, etc.). One need evaluate results, reputation, and motivation in unsolicited advice.
Somebody once wrote that stock brokers are called “brokers” because they are always more broke than you are”.
Personally, I knew the dot-com boom was about to end when I overheard an acquaintance who knew nothing of the working or business worlds (trust fund baby) recommending a tech stock, not unlike Bernard Baruch’s experience with the shoeshine boy in 1929.
I made my own mistakes trusting brokers when I was first out of school, and have taken only my own counsel on investments since then. I now sleep better with better long-term returns and lower volatility.
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While I don’t live in a place with TJ’s, so I can’t comment on the store itself, I can tell you that a LOT of processed food items in the regular supermarkets are coming from China and other places these days (not to mention a lot of fresh produce comes from overseas as well).
Just check the labels of your frozen and canned goods. It can be quite interesting to see where some of your food is coming from.
Just another reason why I long to be able to just plant my own vegetable garden.
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I wish that we had a TJ here! I love some of their stuff.
Sounds like you got an awesome collection, and especially the book with the same name as your blog!
Look forward to hearing the reviews too!
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I’ve heard the shoeshine boy story attributed to various people — usually Diamond Joe Kennedy. I’d never even heard of Bernard Baruch before tonight, but after some Googling I’m a little embarrassed of my ignorance. I can’t seem to find any reliable source attributing the shoeshine boy story to any one person — it’s probably an urban legend.
When Trader Joe’s came to town a few years ago, I was impressed. Then Whole Foods came to town and suddenly I wasn’t so impressed with Trader Joe’s any more. But I still do most of my shopping at Kroger because it’s closer.
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Dave: that is flawed. If I had even $2k to invest in each of the top five or so stocks that I watched back in late 98, I would have a significantly stronger portfolio today (and no, they weren’t all tech stocks). Given that I had just finished college, was not making much money and was living paycheck to paycheck, I couldn’t afford to invest any money. It also doesn’t mean that I was clueless about those companies and that they, by sheer luck, all did well. I simply recognized those companies as having solid foundations and much room for growth, period.
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SR: I don’t doubt that people who make or have little can have good investing insight or ideas. But they have little or no track record (and no assets with which to create a track record). Proof is in the pudding. And conflict of interest is not to be discounted (e.g. the adviser having a long position in a stock he recommends)
And given that academic studies and rigorous statistical analysis show that even the best money managers (even Warren Buffett) owe much or most of their success to just being in the market (rising tide lifts all boats) or certain asset classes regardless of which stocks in those classes (see Fama and French’s 3-factor model), there seems to be a Lake Wobegone effect; that is, most investors and money managers significantly overrate their investing acumen and performance, and they mistake their luck for skill.
The very few who truly see and can take advantage of market inefficiency (e.g. undervaluation) are rare indeed. Remeber Enron? It was a chimera. Under the heading of true investing genious, Micheal Milken studied the junk bond market and found that most “junk” bonds were rarely defaulted on, indicating systemic undervaluation. But his strategy to take advantage of this became known to others and his manipulation of the market to that end did end up arbitraging away the very inefficiency he found (through the bidding up of bond prices, making the prices more commensurate with the risk and even higher than the risk warranted). The result was an eventual collapse of the junk bond market (and the loss of modest and huge portfolios), not unlike the tech boom/bust.
If ANY investor, small or large, experienced or not, had some unique insight into the market (as opposed to the luck of just being in the market), he would only be able to take advantage of it IF he kept it to himself so as not to let the market arbitrage away the value of the insight.
Remember, brokers make most of their money on commissions, not on their own trades of stock. Their “proprietary models” just doesn’t translate to consistent success in both up and down markets; their proprietary research is used as a sales pitch that earns them commissions.
And commissions and money management fees are huge drags on returns of a portfolio in the long-term. If you can avoid those fees through passive management(e.g. index funds), then don’t take advice from ANYBODY, big or small… passive management of a well-diversified market-like portfolio is almost guaranteed to as well as the entire market, which is better than almost all active managers of money do for their portfolios over the long term (after fees are subtracted). Money managers are rich because of fees, not because of unique investing skill.
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I’m with Anne and Dustin Coates. I don’t get the appeal of that store at all.
They don’t carry everything a regular grocery store does, so if I shopped there, I’d have to visit other stores too just to get my groceries for the week. They sell mostly prepackaged food, even the produce. Which mostly comes from non local sources–by which I mean not from this continent.
Pretty much the opposite of what I’m looking for in a grocery store. I prefer fresh, local, organic produce, and like to stay away from canned, frozen, plastic-wrapped, and processed foods. And I like to be able to get all I need in one place if possible.
And I definitely prefer not to buy even my produce wrapped up in (and tasting like) plastic and sitting on a little tray made of who knows what.
I can see that some of the other, non produce products might be okay, but at least where I live, those can be found elsewhere just as easily and for the same or similar prices. All TJs has going for it, in my view, is the cheap wine.
I’ve been trying to figure out what other people see in that store for a long time now. But like another commenter mentioned about themselves, I too often have a hard time understanding the reasons behind much of what is popular.
So, while I can’t get on the TJs bandwagon, I do like books, and look forward to the reviews of the ones you bought, JD.
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Never been to Trader Joe’s but I just wanted to comment that I enjoyed the post and had a good chuckle. I’d love to hear what he told his friends about your purchase. After all, book store, music & dvd store clerks love to tell a good story about the “wierdo” that came into their store today.
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My lady friend loves Trader Joe’s and brings me stuff from there whenever she travels near one. Only thing is we don’t have one here in Hawai’i!
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TJ’s has its pros/cons – it’ll never go public. I’ve read many articles and they’re planning to stay private.
Stay away from TJ’s produce and fruit in general. Look at the country of origin labels particularly on those blackberries – they are from Chile. I suspect TJ’s sources individual ingredients in their products from China which is why they’re so cheap. I’ve sent them numerous emails about sourcing from China and unless a large majority of people protest they’re not going to change. There was an article in the WSJ last week about imports of ginger from China. TJ has stopped importing ginger from China because of the safety issues.
http://www.azcentral.com/arizonarepublic/business/articles/1120biz-chinaimports1120.html
This particular quote is startling “Trader Joe’s, a Monrovia, Calif., grocery chain with about 280 stores in more than 20 states, decided to indefinitely discontinue sales of all individual food products from China by year’s end, a spokeswoman said. “
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Are you kidding? OF COURSE, buy stocks. The way you keep from going bust is to keep an eye on
your stocks. Naturally, you can’t win them all, but you can sure narrow the odds if you do.
I’LL buy Trader Joe’s if it goes public, if I can swing it.
I do not shop at Trader Joe’s. Too expensive.
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